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Unique ways to acquire property  RSS feed

 
                                      
Posts: 5
Location: Leander, TX 8b
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Hello, I'm looking to move my family onto a homestead in Texas and I was wondering what unconventional ways people have used to acquire land for their homestead. I have good credit and I will have about 15K to put as a down payment for a property, however my income hasn't been steady so I will not qualify for a conventional loan. (at least I don't think so) So I'm trying to get creative and see what ideas you folks have that I may not be thinking of. I would like this to happen within the next year to 2 years so I'm not in an incredible rush, but I want my family to be enjoying the benefits of the country life as soon as possible! Thanks for reading and also thanks for your replies! Any info will help!

Sincerely,
Royce
 
pollinator
Posts: 10116
Location: Central Texas USA Latitude 30 Zone 8
280
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Where in Texas are you looking?  There's a lot of land for sale in my area but parcels being sold through realtors are probably grossly overpriced.  You might be able to find an old rancher willing to sell you a chunk of his land for a reasonable price.  Lots of ranchers here are getting too old to work their land and their children don't want to work it either.  Keep in mind Texas is in a drought which is expected to last possibly until 2020.

http://tamutimes.tamu.edu/2011/09/29/terrible-news-texas-drought-could-last-until-2020/
 
pollinator
Posts: 1109
Location: Green County, Kentucky
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IMO, the best and probably most unconventional (to most people) way to acquire property is to pay cash for as much land as you have cash for, then build your house as you can afford to do it.  If you are careful what areas of Texas you look in, you probably have a better chance of being left alone to do that there than most other places. 

While you are building live in a cheap (or free) mobile home, or a travel trailer, or a tent, or a shed that was already on the land (or one you build before you start on the house), etc.  Or even a tent.  I've lived in a tent and a travel trailer while building. 

Tips if you go this route.  Build a SMALL house, designing it purposefully to be added onto later, as you can afford it.  DON'T move into the house until it is FINISHED!!!  Down to the last cabinet handle and the last piece of molding.  I guarantee that if you move into an unfinished house, it will NEVER get finished.  Been there, done that.  Don't go for the most expensive materials you can get, but don't skimp, either.  Don't build with shoddy materials, even if it means it takes twice as long to get the place built.  I'm always reminded of the story about the lady who, during the first Depression, saved all the string that packages came tied up in, and spent a year or more crocheting a LOVELY big bedspread with the stuff -- within another year, it was disintegrating, because the materials weren't high enough quality to last.  All that work for nothing.  Don't repeat her mistake with your building materials.

Use passive solar design.  Stay off-grid.  There's no good reason to put all that work into your home, only to owe money to the utility companies for the rest of your life!  Make sure you have water!!!  Put in a water collection system, and make it a big one -- you are likely to need it.  Everything you can do to save money is better than earning it. 

Don't wait too long, or you may lose your chance.  TPTB are setting us up to lose all our money -- get your land before that happens if you possibly can.

Kathleen
 
                                      
Posts: 5
Location: Leander, TX 8b
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Thank you both for your input!! I have planned several ways to capture rainwater and would like our house to be as efficient as possible (so that we don't owe anybody anything). I will try to contact local farmers and ask around because that sounds like a pretty good idea! I also agree with the fact that you shouldn't buy more than you have the money for, however we are still young and have several avenues in which to pay off a loan as soon as possible. Thanks again for the tips and ideas!

-Royce-
 
Kathleen Sanderson
pollinator
Posts: 1109
Location: Green County, Kentucky
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Don't count on being able to pay off a loan, if the economy tips over and goes under, which it's looking like it's going to do eventually.  Just saying.... Better to have one acre paid for than a hundred mortgaged, if things do go bad.  You can always buy more later if things work out.

Kathleen
 
                                      
Posts: 5
Location: Leander, TX 8b
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True words Kathleen, thank you.
 
Posts: 211
Location: Pennsylvania
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Author, Michael Bunker's book, Living Off Off Grid addresses this. He and several like minded people have created a community somewhere in central Tx.
kent
 
steward
Posts: 2524
Location: FL
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With the banking and credit industries shot to hell, selling a home is difficult right now.  Without good credit, financing a home can be equally challenging.  There are ways to buy a home without a bank.  For this house I went with Owner Financing.

The original deal was 5k down, 500/month for a year at 7%, with a balloon at the end for the entire balance.  The land is just right for me, has an antiquated (1972) mobile home with an addition to the entire length, and a garage with a superior frame and cheap but well painted sheating.  It is fenced and cross fenced, has gates in place, a livestock shelter, 4" deep well in a pumphouse, faucets in 4 locations, a few fruit trees and a strip of woods.  I can see one neighbor.

I liked the land.  The trailer has been worked on and is mostly in good repair.  I'm handy with most things around a house although I wont touch electrical.  I met the owner and talked about everything under the sun.  Her husband has passed away a couple years before and the place was too much for her.  She had some life insurance, but invested it without a good idea of how to invest and subsequently lost most of that.  She wanted to buy a place in town with a small lot, near work.  I determined that the refinancing the place will be difficult, but the owner did not have the savvy to repo the place, or the money to pay for an attorney, so I took a chance and wrote the check.

My house in town was also owner financed.  As I had no credit score a bank was not an option.  I went through bankruptcy back in 93 and have taken no loans or credit cards since.  It was not that I had bad credit...I had a blank beacon score.  Because both of these properties are owner financed, I still qualify as a first time home buyer should I ever decide to go to a bank for a mortgage loan.

When the year was near on this place, I talked to the owner with my concerns.  Because the trailer was built in 1972, no bank would carry paper on it.  For most banks the cutoff for mobile home notes is 30 years.  After that, there is no way to secure commercial financing on a mobile home.  I made an offer to refinance with the same terms, 7%, 500/mo, and sweetened the deal by offering another full year of payments up front.  I've made all payments on time or early, and we got along well, even helped her figure out why the furnace did not work in her new place (gas tank was turned off, pilot needed to be lit).  Being a small town it came to my attention through the grapeving that she had put what was left of the life insurance money on her new place and a new car.  She was broke and there was no way for her to hire an attorney to foreclose.  So I held the cards.  I made the offer, with a check, and the deal was made.  Because I'm a great guy, I pay her early every 2 months rather than monthly.  While the note says I have 7 years to pay off the balance, I should have it paid off in less than 3.

Mind you, there are plenty of folks out there who know the routine, and can serve you papers in a heartbeat if you miss a payment or fail to meet a balloon.  Some more unscrupulous characters use owner financing as a means of drawing an income from a property and snatch it back in order to repeat the process with another victim.  If you get to the closing and the seller pulls out an Agreement to Deed or some other surprise, take this as a red flag and walk away from the deal.
 
Tyler Ludens
pollinator
Posts: 10116
Location: Central Texas USA Latitude 30 Zone 8
280
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machinemaker wrote:
Author, Michael Bunker's book, Living Off Off Grid addresses this. He and several like minded people have created a community somewhere in central Tx.
kent



Here's a blog about that community:  http://journal.michaelbunker.com/
 
                                      
Posts: 5
Location: Leander, TX 8b
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Owner financing is definitely a viable option, thanks! I will try to keep that option open!
 
steward
Posts: 979
Location: Northern Zone, Costa Rica - 200 to 300 meters Tropical Humid Rainforest
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RoyceSanders2006@y wrote:
Owner financing is definitely a viable option, thanks! I will try to keep that option open!



I would be looking at rent with an option to buy with an owner. It is a pretty big leap you are taking, good to see if it works, first.
 
Posts: 6
Location: Central Texas, zone 8
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If you have a steady job with a 401k that you've saved up and you'll keep that job while living on the new property, another option is to take out a loan out of your 401k. My husband and I are looking into doing this to purchase our dream property. The way it works is you can borrow up to 50% of what's in your 401k (in our case that means consolidating several separate 401k accounts from different past employers). You then have 5 years to pay it off, plus interest. You get to keep all the interest, so it's better than giving it all to a bank. The risk is that if you quit or leave your job before it's paid off, you will have to pay it off in full or incur a tax penalty. And of course any loan is risky in general.

Another down side is that your money isn't earning income in the stock market while you take it out, but these days what does that mean?
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